- J Markezic and M Bacina
SEC Approves Futures based Bitcoin ETF in US
The US Securities and Exchange Commission (SEC) has allowed NYSE Arca and Teucrium to issue a Bitcoin futures exchange-traded fund (ETF) using Bitcoin futures (rather than actual Bitcoin). The announcement by the SEC follows rejections of all spot Bitcoin ETF applications, primarily due to concerns about market manipulation and a lack of surveillance-sharing arrangements between ETF issuers and sizeable markets.
Teucrium and NYSE Arca had filed the application, and these two companies were already approved as Bitcoin futures ETF issuers under a different legislative regime. The SEC said:
This approval order is based on all of the Exchange’s representations and description of the Fund, including those set forth above and in Amendment No. 2. The Commission notes that the Shares must comply with the requirements of [the rules] to be listed and traded on the Exchange on an initial and continuing basis.
The SEC's approval opens up a few different doors, posing the potential for spot Bitcoin ETFs. Crypto-analyst James Seyffart has relied upon the Grayscale Bitcoin Fund example - which is a subsidiary of CoinDesk - arguing in favour of announcement like these by the SEC, saying:
like situations must be treated alike.
While not completely unexpected, it is interesting to see the SEC's history with respect to spot ETF applications with a number of such applications for ETFs pending in Australia.